The Weekly Listen: Why AI might be hitting a wall, the impact of impending tariffs, and more

On today’s podcast episode, we discuss if AI development is slowing down or speeding up, when it’s all said and done what happens to TikTok, if live sports are under threat from highlights, the potential impact of impending tariffs, which sports kids play the most, and more. Tune in to the discussion with Senior Director of Podcasts and host Marcus Johnson, Senior Director of Forecasts Oscar Orozco, Principal Forecasting Writer Ethan Cramer-Flood, and Senior Forecasting Analyst Zach Goldner.

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Episode Transcript:

Marcus Johnson:

Data collaboration enables innovative companies to uncover powerful new insights that transform customer experiences and fuel business growth. With LiveRamp, marketers get the industry's only interoperable platform for data collaboration across every cloud, walled garden and media platform. Learn more at Liveramp.com.

Hello everyone, and thanks for hanging out with us for the behind the Numbers Weekly Listen and eMarketer podcast made possible by a LiveRamp. This is the Friday show that for years has been telling Oscar to hire him as his fantasy football offensive coordinator. Lord knows you need the help.

Oscar Orozco:

I could have used you this year, Marcus. That's perfect-

Marcus Johnson:

This year? How bad is it?

Ethan Cramer-Flood:

You all got Josh Allen?

Oscar Orozco:

Yeah. No, of course not. No playoffs, but I'm still the reigning champ, so-

Marcus Johnson:

Of when?

Oscar Orozco:

Until I'm dethroned, I'm still the champ.

Marcus Johnson:

You won last year?

Oscar Orozco:

Of course, without your help Marcus.

Marcus Johnson:

What do mean without me? Then you fired me and this is where you are now. This is where you find yourself. Salary, you ask? Speak to my agent. I'm your host Marcus Johnson, offensive coordinator for Oscar's fantasy football team next year. In today's show, is AI hitting a wall?

Oscar Orozco:

We're not seeing those expenses drop. We've seen numbers out there from a query costing about 36 cents to the upkeep, the daily upkeep of these platforms being close to $700,000 a day just to keep it going.

Marcus Johnson:

When it's all said and done, what will happen to TikTok?

Ethan Cramer-Flood:

The question is whether or not Donald Trump actually cares enough to follow through on making a significant effort in rescuing TikTok because it would be a significant effort.

Marcus Johnson:

Is live sports under threat from highlights?

Zach Goldner:

When you look at ESPN's Sports Center under top 10, would you ever say that that made people watch sports less? No. It was a great way to get people to actually want to go ahead and watch live sports. So...

Marcus Johnson:

What will the impact of tariffs be and what is the most popular sport for kids to play?

Join me for this episode. We have three people. Let's meet them. Then we start with our senior forecasting director. He is based in New York City and we call him Oscar Orozco.

Zach Goldner:

Hello listeners. Hello Marcus. Thanks for having me.

Marcus Johnson:

Hey, fellow, of course. Thank you for being here. We're also joined by, everyone's on that team pretty much but this chap goes by the title Senior Forecasting Analyst. He is based in Colorado. It's Zach, did I say that right?

Zach Goldner:

Yep.

Marcus Johnson:

Colorado-

Zach Goldner:

My name is Zach and Colorado is where I live.

Marcus Johnson:

His name's just Zach. No last name. His name's Zach-

Ethan Cramer-Flood:

You were going so well.

Marcus Johnson:

I now.

Ethan Cramer-Flood:

Everything was fine.

Marcus Johnson:

I always question where he is. I don't know why. Welcome Zach.

Zach Goldner:

Thank you. Thank you, Marcus.

Marcus Johnson:

It's like Prince, just the one name.

Zach Goldner:

The forecaster, formerly known as Zach.

Marcus Johnson:

We're also joined by Ethan Cramer-Flood. He is our principal forecasting writer. He is also based in New York. Welcome fella.

Ethan Cramer-Flood:

Merry holidays, gentlemen.

Marcus Johnson:

Merry holidays?

Ethan Cramer-Flood:

In advance?

Oscar Orozco:

Fancy you.

Ethan Cramer-Flood:

No? Too early?

Marcus Johnson:

No one's ever said... Well, it's not too early. It's just no one's ever phrased it that way before.

Ethan Cramer-Flood:

Yeah, well-

Oscar Orozco:

Is it happy Christmas, Marcus. Is that how you should say it?

Marcus Johnson:

Anything else, I think, other than merry holidays. But the same to you, Ethan. Thanks for saying.

Ethan Cramer-Flood:

Yeah-

Marcus Johnson:

All right, what do we have in store for you? A story of the week, a game, and we end with some random trivia. Let's get to it. We start of course, with the story of the week.

Is AI hitting a wall? Great question. Alex Heath, deputy editor of the Verge writes that until now, the AI hype cycle has been predicated on the theory that throwing more data and compute at training new AI models will result in exponentially better results. But he says as he first reported in the newsletter that he was writing for, Google and others are starting to see diminishing returns from training their next models. This proverbial wall challenges the assumption that the next crop of major AI models will be dramatically smarter than what exists today. So just this idea that if you make models bigger, they're going to be smarter and that can continue until the end of time. That's the theory that's being questioned now, even though, I don't know if people actually promised that in the first place. But there's been that expectation given that ChatGPT came on to the scene two years ago and we've seen the speed of development in AI that we've witnessed up until this point which just seems to be moving at such an accelerated rate.

So the gents are going to argue the different positions here. Oscar's going to kick us off. Answering yes to the question, has AI hit a war? Oscar is going to say why it has.

Oscar Orozco:

I took this question and split into two, looking at it from the platform's perspective but also from the consumers, how we are feeling about gen AI now that we've seen it in place for year... Not years, I would say months, many months at this point. So you said yourself, Marcus, the diminishing returns. Open AI has admittedly said that the rate of improvement is slow but I'm looking at it from an expense cost standpoint. We're not seeing those expenses drop. We've seen numbers out there from a query costing about 36 cents to the upkeep, the daily upkeep of these platforms being close to $700,000 a day just to keep it going. So the ongoing maintenance of them is really diminishing those returns, and so the ROI is just not there yet. And I was looking at a stat or a prediction really from Gartner that said by 2028, more than 50% of enterprises that have built large AI models from scratch will abandon their efforts due to costs complexity and technical debt in their deployments was what they said.

Then from the other angle, the consumers, there's fatigue with it and I think, for example, a Pew study found 52% of Americans are more concerned than excited about AI in their life. Those that are familiar are concerned about the government regulating it enough. So there's a lot, what was skepticism has shifted to a bit of fear even dislike.

Marcus Johnson:

Yeah.

Oscar Orozco:

So-

Marcus Johnson:

And on that point, that number's gone up, right? You said-

Oscar Orozco:

It has gone up.

Marcus Johnson:

... said 52% of Americans are more concerned than excited about AI in their daily lives. That was 37% two years ago.

Oscar Orozco:

There you go. Exactly. So these numbers are going up and as I said from just that skepticism, more of this dislike, this fear, this, I would even say just the fatigue aspect. So overall, I think we are hitting this wall and I'm not quite sure what's to come in the next six to 12 months.

Marcus Johnson:

Yeah, it's, Zach interesting. You're going to be arguing that the maybe side of this, to touch on something that Oscar said before you go the cost, these things cost a lot to run and that's the current version. The smarter they get, the more they're going to cost to run OpenAI saying that about 700 grand to run that model or its models every single day. Scale that number up, you see how expensive it can be to run these things, let alone improve them. Another thing that's a concern here is extremely high energy use that could put the brakes on AI use. Quanta Goldman Sachs data centers currently consume one to 2% of all global power, specifically in the U.S. That number data centers consuming 3 to 4% of the country's power. That was in 2022, let alone where it's at now was projected to reach 8% by 2030 which is basically in five years time and in certain states is even higher. Currently this year, in over five states in the US data centers account for over 10% of electricity demand.

So extremely high energy use could put the brakes on AI use. Oscar mentioned a couple of other factors as well which could maybe slow down the pace of development for AI. Zach, you're arguing the maybe case, maybe AI has hit the wall. What do you think?

Zach Goldner:

Yeah, Marcus. I don't know if AI has necessarily hit a wall but I can say for certain that Oscar's fantasy football team did. But yeah-

Marcus Johnson:

Thank you.

Zach Goldner:

I think it maybe has. But going back to both your point and Oscar's point about AI running up a budget or a deficit, when has the US ever cared about its debt? We care about the end results here. I think that's what-

Marcus Johnson:

Yeah. Fair.

Zach Goldner:

... we're looking forward to for AI. Just speaking of AI for a moment when it comes to ROI, I don't think that we're going to see the same return on investment that we did a couple years ago. And yes, that means that your Nvidia stock might not triple again in value this year but when it comes consumer facing and of AI, I think we now are seeing that the public has a so-what approach to AI? That's because most of their visible impacts, their daily lives using AI have been incremental. Over the last year through the new models, they've experienced modest improvements like polished grammar with fewer errors. These enhancements, while they are noticeable, they aren't absolutely huge. I think that we can compare this to other technologies that were in its infancy. You could compare it to smartphones back in 2007 or the internet in 1990s. Right now what we're seeing with AI is it's only a year or two into the public actually using it at mass. Right now, we're seeing the tip of the iceberg with these AI improvements.

While they might seem small to us, I think we're going to be seeing big changes here in the future. I think that people are underestimating what they're going to see in the long term when it comes to autonomous vehicles, when it comes to healthcare and other industries as well. So while it might be hitting a slight wall at the moment, we're going to see vast changes to AI in the coming years.

Marcus Johnson:

Mm-hmm. Ethan, is-

Ethan Cramer-Flood:

Do I still have to go? I mean, Zach just basically made my point for me. Any-

Marcus Johnson:

I was going to say-

Ethan Cramer-Flood:

... I have a different-

Marcus Johnson:

... that's dream case as to why hell no, AI-

Ethan Cramer-Flood:

Yeah.

Marcus Johnson:

.. has not hit a wall.

Ethan Cramer-Flood:

I don't know about hell no but I mean I agree that everyone's making entirely reasonable points. When I saw this question, my reaction to what the AI community is talking about when they say that maybe they're hitting a wall was that this wall is not really that relevant to the average person out there. So that the types of progress that they've been making, these computational advancements, this increase, exponential increase in power has not really proven to be all that relevant to the average consumer or even the average business user anyway which is why I was like, "Who cares about..." This wall is not the wall, and in fact, this could even be a hidden benefit. If they put less investment and energy and effort into constantly improving the processing power of these models and instead start focusing on applications which has been the real problem since the beginning, then we might actually find a way forward.

Because the reality is that here we are multiple years into this storyline, and AI itself has little to no impact on the daily life of the average person. Whether the average consumer in their private life, the average employee. Obviously, it's become successful in certain corners of the business world and certain people use it every day for whatever reason but most people it just doesn't matter at all. So who cares if this processing power is 10 times stronger three months from now or not because so far, they haven't cracked the code on the consumer facing side. They already can, they just need to figure it out. In fact, probably what they need is smaller models. More targeted use of the capabilities that already exist that can solve individual specific problems or give us specific functions and services on our mobile devices in the office in a way that actually does what we needed to do instead of these generalized approaches that frankly don't really work that well.

Marcus Johnson:

Yeah.

Ethan Cramer-Flood:

The stuff that's out there right now that most of us can't even figure out how it might help us do our job better because it's too general, it needs to be more specific. They could start working on this now and then the ball starts to move forward.

Oscar Orozco:

Yeah.

Marcus Johnson:

Yeah, that's a great point. Not just, here's this thing, figure out how is best to use it but here's this very specific thing that's going to help you with a specific task and improve upon it significantly. Your point is well taken, Alex Heath of the Verge was saying a similar thing. Slowing AI progress might not be a bad thing. Basically given how frenetic the past year has been, might let the world catch its breath on AI developments and the speed of it. To circle back to what Oscar was saying initially, is partly why the share of Americans who are more concerned and excited about AI in their daily lives has gone up. So maybe it's not a bad thing if AI takes a breath and doesn't obsess over the next model or a faster model or a bigger model or whatever it might be. All right, gents, that's where we'll leave the story of the week. We move now to the game of the week. Today's game, the super-duper game.

How does it work? Three rounds. Fortune teller, the random scale and fill in the blank. The better the answers, the more points you get. We start with Ethan for round one. We have fortune teller. That's where we predict the future. A court has upheld a US ban of TikTok, writes Bobby Allen of NPR. He explains that last week a federal appeals court on Friday upheld a law banning TikTok nationwide unless the video app was sold off by its China-based parent company. Rejecting TikTok's claim that the crackdown violates the free speech rights of millions of Americans. The court said TikTok's ownership by a China-based company ByteDance, represents a national security threat that surpasses the free speech concerns TikTok raised. However, the incoming president-elect Donald Trump has vowed to save TikTok. Appeals and case re-examinations are likely. After that, the Supreme Court could be asked to weigh in.

TikTok has asked the court to freeze the sale or ban law until the new administration gets into the office. That's because the ban is for Jan 19th, and the new president comes in on the 20th. But fortune teller, Ethan, when it's all said and done, what happens to TikTok?

Ethan Cramer-Flood:

When it's all said and done, that's tough but I will go out on a limb and predict that on Jan 19th, this is going to happen. Inasmuch as much as TikTok is going to disappear from the app store on your Apple and Android devices and everyone is going to freak out, that's going to be big news. However, that doesn't mean anything's really going to happen, right? TikTok is still going to function. It's still going to be here. Business will proceed as normal for a while and then we'll start to see how this is going to play out. The question is whether or not Donald Trump actually cares enough to follow through on making a significant effort in rescuing TikTok because it would be a significant effort, right?

The ball is rolling now and it's going to take effort to stop the ball. It's a little different as opposed to acting to block TikTok. Now it's going to happen and it's going to require effort to stop it. Why would anyone necessarily put in this effort? I think it's going to get really interesting. I think we're going to have a lot of fun talking about this for a few months as we see how it plays out.

Marcus Johnson:

Yeah. To Ethan's point, when it gets banned, it doesn't disappear from your device. You just can't download anymore and you can't get updates for it anymore on the app stores which means over time, the experience will get worse. People eventually stop using it. So that's what the ban means. It won't just disappear from your phones. Zach, what do you think?

Zach Goldner:

My guess is as good as any, I think all signs are pointing towards the courts siding against TikTok even that we should expect there to continue to be further appeals. But for better or worse, I truly believe the fate of stands in President-elect Trump's hands rather than that of the courts. He made a promise to the public that he would keep TikTok running. We'll see if he follows through with that promise. From an advertising perspective, I believe that it's business as usual. We might see some advertisers hold back some spend but for our forecast, we're still expecting TikTok to exist in 2025 and the years to follow. Next year, we're expecting US' TikTok ad business to reach $15.5 billion which is a 25% increase versus 2025. That's a lot of money that's at risk. That could fall into the hands of Meta, Snapchat, YouTube, and other companies. Something we're going to continue to monitor but really no one knows at this point.

Marcus Johnson:

Yeah, good points. Oscar?

Oscar Orozco:

Yeah. I mean this is a tough one. Dare I say the toughest fortune teller question you've ever posed, Marcus, really. It's anyone's guess but I think I am ready to take a bolder or make a bolder statement than my colleagues here are making. And that said, I do think TikTok ultimately won't be sold off. I think President-elect Trump has, it is become an important enough issue for him that he will get involved. So what I think will happen was TikTok will take some minor steps to distance itself from its parent company. It'll be all more show than substantive, really. We'll see some vague declarations from President Trump saying that TikTok has taken enough steps, that it's enough. He'll take credit for this as well and it'll all be a part of some larger brokerage deal that'll help with China U.S. relations.

So there won't be an actual divestiture but TikTok will take some step to improve relations and to help with security concerns. All being that U.S. consumers will stand to benefit from all this because TikTok will remain one of the more popular apps that people use in this country. So that's what I think will happen.

Zach Goldner:

I think Oscar's pretty spot on.

Ethan Cramer-Flood:

Can I take 30 more seconds?

Marcus Johnson:

Please? Yeah, jump in.

Ethan Cramer-Flood:

Can I take 30 more seconds because I am cautious that the idea that Trump cares about this a lot, maybe a media creation. It's not clear that this is actually a huge priority. I mean, he tweeted about it once nine months ago and then there's another line from-

Zach Goldner:

Ethan, he truthed it.

Ethan Cramer-Flood:

Yeah. That was nine months ago and then maybe there was one other sentence a few months back. So to my point, the ball is already rolling now. So for him to come in and rescue TikTok, he is the type of person who would want something for that. This is now a bargaining chip against something else. Why would he do it for nothing? And meanwhile, the Chinese government is almost certainly not going to acquiesce to a straight sale. So you have all sorts of complexities.

Marcus Johnson:

Yeah.

Ethan Cramer-Flood:

It's going to be a bargaining chip. He's going to want something in return from somebody for saving this because if he doesn't save it, it doesn't matter. This is not that important. He can just let it go unless someone gives him a reason to save it. So I would not be that confident that this guy's just going to stick his neck out.

Oscar Orozco:

I do-

Marcus Johnson:

Yeah.

Oscar Orozco:

We've been hearing in the press that domestic analysts in China have been saying that the Chinese government would potentially be up for putting it on the auction block, the app. So-

Ethan Cramer-Flood:

I strongly disagree.

Oscar Orozco:

I mean, I think we'll see-

Ethan Cramer-Flood:

I strongly disagree. There is no reason for them to do that.

Zach Goldner:

$15 billion, Ethan. $15 billion in the US market which is just under half of TikToks global ad revenues.

Ethan Cramer-Flood:

But that's utterly inconsequential to the Chinese government. I mean, this is a private tech company, they don't care. It's not their money. This is purely about geopolitical face. They have no reason to give TikTok to an American investors to make money off of.

Marcus Johnson:

It's also interesting because the public has said that they would prefer it to be banned. If you look at most of the recent surveys that we've got and now a few months old at this point, they all point to the majority of Americans saying, "I'd prefer to ban it." Even though TikTok users would prefer to keep it and young people prefer to keep it. When you look at the population, most people say get rid of it because it is national security threat. So if he's taking-

Oscar Orozco:

But that's gone down.

Marcus Johnson:

... the pulse of public opinion-

Zach Goldner:

Yeah. That sentiment has been changing over the months Marcus.

Oscar Orozco:

If you look at Pew, that's been changing.

Zach Goldner:

Yeah.

Marcus Johnson:

In the last couple of months? Interesting.

Oscar Orozco:

Yeah.

Zach Goldner:

It has been.

Marcus Johnson:

Okay.

Zach Goldner:

It has been.

Marcus Johnson:

Okay. So maybe that moves the needle on his position. All right, gents, let's move to round two. Great arguments for round one though. The random scale is what we have for round two where folks tell me where they land using the random scale. We're talking about whether live sports is under threat from highlights. So two thirds of global sports executives are concerned about the relevance of live sports as more younger fans gravitate towards highlights, documentaries and short form videos from fans, teams and players over watching live games on video, according to Altman Sollens 2024 Global Sport survey. Know it's an advanced television article. Altman Sollens partner David Delia said, "We've reached the tipping point where content originally created to generate interest in the games, highlights, has become as sought after as the games themselves." But Zach, we'll go to you first for the random scale. Is live sports under threat from highlights? Your possible choices, one, more highlights mean more sports viewership, so no. Two, more highlights will slowly lessen sports viewership or three, more highlights have already taken and will continue to take a huge bite out of sports viewership.

Zach Goldner:

Yeah. My take here is that more highlights do mean more sports viewership. And to break this down, I think we have to go into the root problem of sports as is. At the moment, watching your favorite team can be expensive. And number two, watching the full game is a big time commitment. When you think about it, a college football game now averages three and a half hours per game. In the article you sent over, it listed that two thirds of sports fans reported that they have a difficult time accessing their favorite live sports. So that goes along with it being expensive or maybe them not having live TV. So with the rise of highlights, it actually draws in more people into sports than threatens with live viewership. Once you alienate your fans, you won't actually get them back.

So by keeping them entertained and keeping their fandom through snippets, that once they reach a different life stage and they can afford their sport or have the time of day-

Marcus Johnson:

Interesting.

Zach Goldner:

... to sit and watch that full game, I think those highlights are going to keep and prop up the sport for the years to come.

Marcus Johnson:

Okay.

Zach Goldner:

Oh, one last thing I want to add-

Marcus Johnson:

Oh please.

Zach Goldner:

... on to that as well.

Marcus Johnson:

Yeah.

Zach Goldner:

When we talk about highlights, let's talk about the OG highlights. When you look at ESPN's Sports Center Top 10 Countdown, would you ever say that that made people watch sports less? No. It was a great way to get people to actually want to go ahead and watch live sports itself.

Marcus Johnson:

Yeah. Fair point. Oscar, what do you think, mate?

Oscar Orozco:

I'm surprised by that, Zach. I thought as a Gen Z-er, you were going to say something else there but I fully agree with you. I mean, I would go with that first option. More highlights means more sports viewership. I would even rephrase that as highlights are a great supplement to sports viewership. That's the way I'm interpreting it also. I think this story came potentially, there's been various surveys on this, but the YouGov survey found that 18 to 24 year olds do prefer watching clips or highlights of live games more than watching games in their entirety. But if you look at the survey and almost a nearly identical number was a little bit less prefer watching live games while 25% of them enjoy watching both. So it was split. And then when you looked at all the other age breakouts, there's clear indication that everyone else prefers to watch the actual game.

So I just think it's a nice supplement. It speaks to short video content that's become so popular, social media use, and that's where the media platforms and sports leagues are, rightfully so. They're shifting some of their content there but it's just a supplement to what people are watching when they're watching their favorite sports teams play on live TV.

Marcus Johnson:

Ethan?

Ethan Cramer-Flood:

Yeah, I mean this sounds like a whiny red herring to me. If the worldwide sports industry or the various leagues kill the golden goose, it's not going to be because of highlights and short form videos, it's going to be because they've made their own products so difficult to access or too expensive for young people to access and then build that generational fandom because they're so incredibly greedy that they take the biggest possible check, even if that puts their product somewhere that is harder for fans to see. To Zach's point, actually, I think people did say back in the eighties and nineties that things like Sports Center were possibly a risk. They did make this same hair pulling frantic argument. "Oh, the highlight, now those highlights are so accessible, people aren't going to watch the games." That was obviously ridiculous back then and it's still ridiculous now. This is not going to be a problem.

Marcus Johnson:

Yeah. There was an article the other day showing that you need at least three streaming services to watch all the NFL games. Different ones have different games but you'll need at least a combination of three of the seven that cover the NFL to watch all of the games. So that is relatively prohibitive. It's really interesting by age and by sport as well. There's some data from Manu Group for Variety Intelligent platform. They were showing that it really depends on if it's a longer season sport like MLB or NBA, a lot of fans will watch highlights there. Whereas if you look at something like NFL, close to half of the 18 to 34 year olds prefer watching highlights to full games. But when you look at 35 to 49 year olds, just 20% prefer highlights and even less for older folks. So it also depends on the sport quite greatly according to this research. All right, gents, let's move to round three. Fill in the blank is what we have from our final round where folks, you get the point. Start with Oscar, the impact of-

Ethan Cramer-Flood:

Wait, you got to explain how fill the blank works. Do you think our audience just understands?

Marcus Johnson:

It's mainly for Oscar but I think he's got it by now.

Oscar Orozco:

Hey.

Marcus Johnson:

The impact-

Oscar Orozco:

About to win this thing.

Marcus Johnson:

The impact of impending tariffs is what we have for our final round. Many retailers came through relatively unscathed by Donald Trump's tariffs imposed starting in 2018. This time round though tariffs have the potential to bite more, writes Jinju Lee of The Journal. She explains that President-elect Donald Trump has proposed a universal tariff of 10 to 20% on all imports to the US and a 60% or more tariff on goods from China. The tariff impact was clearest for retail categories hits in 2018. For example, a 20% tariff went into effect on imported residential washing machines in early 2018. She writes saying in the response, the prices of washes rose by nearly 12% in the months following the tariffs, according to a 2019 study from economists at the Federal Reserve Board and University of Chicago, implying that consumers absorbed most, but not all of the tariff cost. But Oscar, fill in the blank, the impact of tariffs. These tariffs will be blank.

Oscar Orozco:

Blank. Let's fill it in with catastrophic and I think we're all going to agree on this, right guys? For the U.S. consumer.

Marcus Johnson:

Don't you try and influence the panel.

Oscar Orozco:

Well, I mean it's true and I have a couple data points here. Shout out to some BBC research which was great on this, but as you said, studies of the impact of new tariffs that Trump did impose in his first term showed that ultimately, the economic burden was borne by the U.S. consumer, not by the importing firm or by the foreign exporter because they supposedly would choose to lower the cost of their wholesale price or the wholesale price of the goods. It's just not how it works. I would even point out a recent survey from the University of Chicago. They asked a group of respected economists about the statement that imposing tariffs would result in a substantial portion of the tariffs being borne by consumers of the country that enact the tariffs. 98% agreed with this statement, meaning that it's the consumer who's going to suffer. So that's ultimately what would happen.

Marcus Johnson:

Okay, Ethan?

Ethan Cramer-Flood:

Catastrophic is a strong word. I would've said the impact of tariffs will be less than people fear but more than people want.

Marcus Johnson:

Interesting.

Ethan Cramer-Flood:

We just saw in November that imports from China to the U.S. were at their highest level in almost three years because retailers and manufacturers were front-loading their inputs so that they can keep this under control, at least over the short and medium term. Also structurally, we've now finally gotten into a cyclical reduction in inflation. So the type of terrible inflation that we've been through the last few years is finally going away. What this will probably do is simply bring it back. So rather than give us a break from the inflation that we've become used to over the last few years, now we'll just keep having to deal with it. So I guess you could use the word catastrophic but it's more just more of the same incredibly aggravating, irritating experience. Although there will probably be a delay because people were prepared for this and we are on a cyclical downturn in pricing in some other ways.

Marcus Johnson:

Yeah. Zach?

Zach Goldner:

My fill in the blank here is that tariffs will be unexpected for many. While companies know what's coming down the pipeline and know how prepared, I don't think the same can be said about consumers. I don't think that many people actually know what a tariff is. According to the Peterson Institute for International Economics, tariffs could cost American households an additional $2,600 a year. That's a lot of money. Two thirds of Americans do know that tariffs lead to higher prices but that leaves a third of Americans not knowing that their bill is going to be higher at the end of the day. There's another poll I looked at that showed that less than half of Americans actually understood that American companies are the ones that pay the tariffs.

So like Ethan said, there will be additional inflation in the years to come and a lot of people aren't aware of that happening. I think the only, or the big positive here is that back in Trump's last presidency, similar tariffs were being implemented and a lot of companies had adapted their supply chains back then. So hopefully, they have off-shored it from being in China to other countries or here in the U.S. So less impact would have occurred than they did eight years ago.

Marcus Johnson:

Mm-hmm. Excellent argument gents. Two things from me really quickly. I went and looked... Actually, I think it was in the... No. Yeah, this was in the article from Jinju Lee citing a National Retail Federation, what do they expect. They were saying in a report that Mr. Trump's proposed tariffs would be too large for U.S. retailers to absorb. With the NRF estimating that the tariffs would raise costs across six retail categories, including apparel, furniture, and household appliances by 362 to $624 per household every year. Ms. Lee does note that one offset could be Mr. Trump's proposed corporate tax cuts which could benefit all U.S. companies bottom lines, whether they use that to balance things out and key prices low is another story. And the second thing here is how the tariffs have changed advertising messaging. You're seeing more buy now before tariffs kick in messaging from folks like Outdoor and Sports Goods Retailer, Tarp Tent, company Home Furnishings, beauty brand, Jolie Skin and others.

All right gents. That's what we we've got time for for the game of the week. This week's winner... Ethan, is this week's winner of the game of the week. Very close indeed.

Ethan Cramer-Flood:

Going out strong.

Marcus Johnson:

Ethan with nine points, Oscar and Zach with eight a piece. So-

Oscar Orozco:

It's easier when you take more time. What's going on here? I'm joking Ethan-

Ethan Cramer-Flood:

That was the main reason.

Oscar Orozco:

That was the well done.

Marcus Johnson:

Well play gents. Ethan, you get the championship belt and the last word.

Ethan Cramer-Flood:

All right. I had almost as good a week as Juan Soto. I mean, you know?

Marcus Johnson:

Yankees-

Ethan Cramer-Flood:

I would-

Marcus Johnson:

What did we do?

Oscar Orozco:

Hey, you brought it up Ethan-

Ethan Cramer-Flood:

It was either hundred 800 million or it was winning this and that's close.

Oscar Orozco:

765 million.

Ethan Cramer-Flood:

765.

Marcus Johnson:

How did they let him walk?

Ethan Cramer-Flood:

We tried to get a free year, right? It was basically the same offer for 16 years or 15 years. And he was like, "Why would I give you a free year?" And that is a reasonable question.

Marcus Johnson:

Yeah. Boston Red Sox still regretting letting go of Mookie Betts, pay the man.

Oscar Orozco:

That's for sure.

Marcus Johnson:

Pay the man.

Oscar Orozco:

Mets fans are rejoicing. We are so happy.

Marcus Johnson:

I bet. Yeah, you're happy every year and it doesn't always-

Zach Goldner:

That's a lot of money to pay an athlete for a sport people don't watch.

Marcus Johnson:

Just highlights.

Ethan Cramer-Flood:

Zach is always on his anti-baseball.

Oscar Orozco:

A reminder his a Gen-Zer.

Zach Goldner:

I'm a Gen-Zer, I don't have the patience to watch a full baseball game.

Marcus Johnson:

We're lucky that you stayed this long. Let's get to the end of the show before he leaves. Congratulations to Ethan. He wins the game of the week and gets the championship belt. We move now before Zach walks away from the recording to dinner party data.

This is the part of the show where we tell about the most interesting thing we've learned this week. We start with our champion of the week, it's Ethan.

Ethan Cramer-Flood:

So as I mentioned in the kickoff, the holidays are here which means that we're all doing our gift shopping-

Marcus Johnson:

Right, yes.

Ethan Cramer-Flood:

Our Christmica gift shopping as we call it in my mix household. So as I was shelling out dollars upon dollars, it occurred to me or I decided to ask ChatGPT the question of who in the world or where in the world do they spend the most on Christmas gifts? I did ask for Christmas. I didn't put it in Christmica because I was like, "I don't think ChatGPT is ready to handle my Hanukkah slash Christmas question-"

Marcus Johnson:

They were like, "That was just your household thing, ask again."

Ethan Cramer-Flood:

So I was like, which countries do they spend the most per capita annually on Christmas gifts?

Oscar Orozco:

Has to be the U.S.

Ethan Cramer-Flood:

And it gave me an answer and this is from ChatGPT. So who knows? I take no responsibility for whether or not this ridiculous AI-

Marcus Johnson:

The tagline, ChatGPT, who knows?

Ethan Cramer-Flood:

I did give it a bit of a difficult question but it gave me an answer with the kind of confidence that it always does. So the top 10 countries where the average person spends the most on Christmas presents per year. Unsurprisingly, this is advanced wealthy countries are going to be at the top of this list although shout out to Mexico for making the top 10, real end Christmas. So the number one country for, anyone have a guess the number one country per-

Marcus Johnson:

It's America.

Ethan Cramer-Flood:

... spending on Christmas-

Oscar Orozco:

USA.

Ethan Cramer-Flood:

It's not. No.

Marcus Johnson:

What?

Ethan Cramer-Flood:

No.

Oscar Orozco:

Huh?

Ethan Cramer-Flood:

Our forecasting team should have some sense of where the answer might be based on one of our colleagues just did.

Oscar Orozco:

Oh.

Ethan Cramer-Flood:

It is Germany.

Oscar Orozco:

Germany.

Ethan Cramer-Flood:

In Germany, the average per capita spending is $1,100 per person.

Marcus Johnson:

Holy what?

Oscar Orozco:

What?

Ethan Cramer-Flood:

And our colleague just went to Germany to go to the famous Christmas markets. They're really into it.

Marcus Johnson:

How interesting.

Ethan Cramer-Flood:

Canada next at 946 and then the U.S. at $826 per person.

Oscar Orozco:

Wow.

Ethan Cramer-Flood:

Now these are all some really big numbers. It drops quickly. By the time you get to the bottom of the top 10 which is the Netherlands, it's only $327 for per person.

Marcus Johnson:

Wow.

Ethan Cramer-Flood:

So you have some countries where we really go for a thousand dollars.

Marcus Johnson:

Germany, what are you doing?

Ethan Cramer-Flood:

I've been spending a lot, I have not spent a thousand.

Oscar Orozco:

We'll get them this year-

Ethan Cramer-Flood:

... so top ten-

Oscar Orozco:

... because of the tariffs.

Ethan Cramer-Flood:

...Germany, Canada, U.S, France, UK, Mexico, Australia, Italy, Spain.

Marcus Johnson:

Is that why you're raising them, just so you could beat Germany? Christmas markets, that's a great reason to spend money though. They are fantastic. All right, very good. Let's move to Zach.

Zach Goldner:

My dinner party data is about time spending on your TV screens. Well, the average American household subscribes to three streaming platforms. And that time that people are spending, the time that people are deciding on what to watch is greater than ever before. Users on Netflix this year are spending on average 18 minutes to choose what they want to watch. An increase of decision making of 50%.

Marcus Johnson:

That's pretty true.

Zach Goldner:

... versus 2019. So choose what you want to watch and just prepare the come the holidays when you're sitting next to your family to watch that next holiday flick. You might be spending a good amount of time to select through Netflix's 15,000 titles and its library.

Ethan Cramer-Flood:

That is an excellent stat.

Marcus Johnson:

That was brilliant.

Oscar Orozco:

Amazing.

Marcus Johnson:

Low though, that sounds low because I spent at least 45 minutes and then leave because I've run out of time. It's time to do something else with my life. Very good though. Oscar, what you got for us?

Oscar Orozco:

Well, with all of the violence we've had recently in the world, I want to talk about something lovable, cuddly and heartwarming with my dinner party data markets. What's cuter than an elephant, right? Do you want to hug one of those? Maybe not? I love elephants, personally.

Marcus Johnson:

Hug an elephant?

Oscar Orozco:

Let's talk about it. Well, it was just something really interesting that was published in a paper.

Marcus Johnson:

How smooth.

Oscar Orozco:

I love elephants. I don't know. Don't you?

Marcus Johnson:

That's fair.

Oscar Orozco:

Yeah.

Marcus Johnson:

They're adorable. I don't know if that hugging one is maybe part of one's leg.

Oscar Orozco:

Yes. Whatever it could be-

Marcus Johnson:

But go ahead.

Oscar Orozco:

... or the ears. But anyway, yes, there was an interesting, I came across this interesting paper that was published at the end of the summer that found that elephants make vocalizations specific to individuals in their social group. In other words, elephants appear to have names for other elephants in their herd. So they're speaking to individual elephants and reaching out to them. So just to be clear, if you're an elephant, your name is probably like a low rumbling sound, something like that, right? So it's not something that humans would consider a name but nonetheless, in a herd, they all have different sounds that are assigned specifically to them. So it appears to be the first non-human animal to address each other in a manner that way. And for example, like dolphins and parrots, they imitate receiver's calls, that's the closest we've ever seen. But feels like elephants are the only animal so far that we're aware of that actually has names for each other in a group. And this was found out by analyzing elephants in a national park in Kenya. So I thought that was really cool study and what they found out there.

Marcus Johnson:

It was cool. It was cool the first time we had it on the podcast as well Oscar.

Oscar Orozco:

Oh.

Ethan Cramer-Flood:

What?

Zach Goldner:

A repeat offender?

Marcus Johnson:

Unbelievable.

Oscar Orozco:

No way.

Marcus Johnson:

We had this one already. I said this one. Right, Victoria?

Oscar Orozco:

What?

Marcus Johnson:

Victoria's like I've got no idea Marcus, what the hell are you talking about?

Ethan Cramer-Flood:

Can't confirm that. I will confirm-

Marcus Johnson:

Don't worry-

Ethan Cramer-Flood:

... though that Marcus is equally guilty of repeating stats.

Marcus Johnson:

Whoa, whoa, whoa.

Oscar Orozco:

I didn't know.

Marcus Johnson:

Where's this come from?

Ethan Cramer-Flood:

You did the tree one twice.

Oscar Orozco:

The cars.

Ethan Cramer-Flood:

With us-

Oscar Orozco:

I always remember the cars-

Ethan Cramer-Flood:

... you did the the tree one twice.

Marcus Johnson:

We've been doing this for eight years. Cut me some slack.

Oscar Orozco:

The white and gray cars-

Zach Goldner:

Oscar, you're trying to avoid violence, look at what you brought.

Marcus Johnson:

How dare you? No, I mean-

Oscar Orozco:

Just delete what Marcus said after it's a great stat.

Marcus Johnson:

I don't know if listeners are listening to every episode we put out, although they should be. So people probably haven't heard this before or if they did, they probably weren't paying attention when I said this.

Oscar Orozco:

This has happened to me once before. I had another one ready, I do not now.

Marcus Johnson:

Yeah.

Oscar Orozco:

So let's just move up.

Marcus Johnson:

Unbelievable. No, it is really good though. I think Nature, Ecology and Evolution, I think it was published in that paper. But fascinating. It is really interesting that they give each other-

Oscar Orozco:

It's adorable.

Marcus Johnson:

... names. Yeah. It's really cool. It's still a very good one. All right folks, I got one for you real quick. Kids sports participation. What is the most popular sport for kids to play? So these stats are ages 6 through 17 come courtesy of Project Play and the Sports and Fitness Industry Association. So we'll start with how many kids play sports in general. So in the last 10 years, the share of kids participating in organized sports. So that sports teams and sports lessons grew 6% from 55 to 61% which is brilliant. Over that same time though, the share of kids participating just on organized sports teams fell from 43% to 40%. So that's people going to play on sports teams where you go to practice a couple times a week as opposed to lessons and just the more broader catchment of sports playing. Most of that drop is amongst boys.

Their share falling nine points from 50 to 41% over those 10 years. Whereas girls sports participation grew one point from 35 to 36 and also minorities. That was a big reason that the number dropped. African-American kids, their share participating in sports fell 10 points from 45 to 35%. Hispanic rates fell four points to 37 and white kids participation from 44 to 41. Asian and Pacific Islander rates ticked up a tiny bit. That was the only group to tick up by one point. So down across the board for most of those groups but mainly minorities and boys. The most popular sports, kids on organized sports teams-

Oscar Orozco:

Soccer.

Marcus Johnson:

... this is, so let's go six to twelve-year-olds first, although it's... Let me see, it's number one and number two are the same for both. So what do you think it is? We got six to twelve-year-olds, the most popular sport?

Ethan Cramer-Flood:

I mean soccer's the easiest one.

Oscar Orozco:

Soccer. Yeah,

Ethan Cramer-Flood:

Right?

Oscar Orozco:

For sure.

Marcus Johnson:

Nope. Basketball.

Zach Goldner:

6 years old?

Marcus Johnson:

14% basketball.

Zach Goldner:

They can't get them the hoop.

Marcus Johnson:

Six to twelve-year-olds, basketball, 14%, baseball 12 and outdoor soccer eight. All of rates are down from 10 years ago. 13 to seventeen-year-olds, it was basketball again, 16%. Then a big drop-off to baseball, 9%. And then golf and tennis basically tied on 8% for those older 13 to seventeen-year-olds. And also finally, huge variations by state in sports participation, school lessons or teams this time. 70% of kids in Vermont play sports. It's the highest versus 41% of kids in New Mexico, the lowest. 11 states in America have participation rates below 50% of kids playing sports.

Ethan Cramer-Flood:

Those changes that you referenced earlier, those were based on change year over year or that was from 10 years ago?

Oscar Orozco:

10 years ago.

Marcus Johnson:

10 years. 2013 to 2023, yes.

Ethan Cramer-Flood:

Mm. Must be lack of funding, huh? Something like that.

Marcus Johnson:

Yeah. People going outside less, maybe a bit on their phones more.

Ethan Cramer-Flood:

Oh, pandemic related stuff, right?

Marcus Johnson:

Pandemic.

Ethan Cramer-Flood:

Pandemic, decline-

Marcus Johnson:

As well.

Ethan Cramer-Flood:

... and than not going back. Yeah.

Marcus Johnson:

Yeah.

Oscar Orozco:

It's become a bit expensive too, perhaps?

Marcus Johnson:

Prices, yeah. People need that money for groceries, potentially. Yeah. The reasons behind this fascinating. So it'd be worth digging a little bit deeper to figure out why but yeah, a lot of those rates. Overall, it had gone up a bit when you look at just playing any sports. So that's positive. But when you look at people playing sports teams and certain groups of people, it is down. But yeah, that's what we've got time for for today's episode. Thank you so much to my guest as always. Thank you first to Ethan. This week's winner of the game of the week.

Ethan Cramer-Flood:

You know it. I had to go out strong. Happy holidays and happy New Year everyone. I'm the champ.

Marcus Johnson:

Yes. Thank you to Oscar.

Oscar Orozco:

Congrats Ethan. And yeah, thanks for having me. Marcus.

Marcus Johnson:

Didn't feel genuine but you're welcome. Congratulations to Zach.

Zach Goldner:

Thanks Marcus. Looks like I'm officially a loser just like my Chicago Bears. I'll go ahead and insult these-

Ethan Cramer-Flood:

There it is.

Marcus Johnson:

That is too true. Thank you so much to Victoria. She edits the show. Stewart runs the team. Sophie does our social media. And Lance, who runs our video podcast with our video podcast back again for you guys in the new year, come January. Thanks to everyone for listening in. We hope to see you on Monday though for the Behind Numbers Daily. That's an eMarketer podcast made possible by LiveRamp. Happiest of weekends.